Monday, June 15, 2015

It seems that the average joe is beginning to understand that his digital data has value. What nerds have long known (if you're not the customer, you're the product) about our interactions with "free" digital services is becoming common knowledge. Many of us would rather pay with money than with our data.

I was part of a design thinking workshop over the weekend where "monetizing the value of personal data" or bringing that value back to the people from whom it came seemed to be part of every prototype. There are many serious efforts underway to change the dynamic between product user/data producer/you and data user/value accruer/big company. These include Open Mustard Seed, Project VRM, and several others.

I'm not an expert on any of this. And I'm as concerned about our ability to demonstrate and achieve public benefit from digital data as I am about my ability to protect my personal data. Public value - not just commercial profit and more advertising revenue for a few corporate behemoths. Real public good - safer, healthier, and more just and beautiful communities.

One idea that came up in the workshop really did catch my attention. And, as design thinking often promises, it was one of those little ideas, mentioned almost in passing, as part of some grander vision.

A daily index of the financial value of digital data.(the data value index - DVI - called it Davy).

Imagine a little graphic that showed how much certain industries were making off the digital data generated by individuals every day. Some rough math would be to simply divide the advertising revenue per quarter by the number of users of that company's product.

Ad revenue of Social media company X
# of users of company X platform = ad revenue/user = proxy for value of you and your data

The daily index would then calculate a version of this for top 3-5 companies in several industries
(social media, search, insurance, healthcare, ...) and be able to show us "how much others were making of our data." In a simple, visual way that would catch our attention. It could be designed as a browser plug in - populating each time you go to a new website that is collecting your data. This might 1) raise awareness of those who don't yet see it, 2) allow individuals to think about this reality, 3) see how it changes over time, 4) see which industries are buying/paying/being paid for this information. The index could join in everywhere we see stock price tickers, Klout scores, or quantified self data.

There are lots of things that might happen with this in the commercial sector. Since I care more about civil society, I wonder if this might help us think about how our data can do good? In health care for example, an alternative DAVY might calculate the value of donated data to clinical trials. Samala and Paul, who were cooking up this idea at the workshop, started imagining how it could be used to influence pricing for affordable housing, or guidance for nonprofits seeking to encourage collective action around a particular community challenge.

I'm often told that my ideas are too nerdy and need better marketing. So here's a suggestion for a simple idea, well expressed (with the caveat that it is intentionally half-baked) - the Data Value Index - showing each of us how much money others are making off of us. As an inspiration to spark both personal responses (Wait, they're making how much off of me?) and to inspire us to see better possible uses (if I donate my information over here, perhaps it will be used to find a cure for cancer, create better public transit systems, point out inequities in educational systems, or improve access to healthy food)

It's half baked (though Paul and Samala may still be working on it). What do you think? Make it better.

*Paul and Samala said it was OK for me to blog this if I credited them by name. Done.

Wednesday, June 10, 2015

I think philanthropy needs to spend more time on digital policy issues. Regular readers of this blog have heard that from me for years.

But digital policy is still - despite my years of trying - not on the agenda of philanthropy policy actors. Tax law is their number one issue. Outsiders have other ideas. David Callahan made a splash in The New York Times a few weeks ago calling for reform of philanthropy policy. The problems that he sees:

Ineffective philanthropic spending

Fraudulent use of charitable dollars

Hiding behind philanthropic anonymity to fund political action

These are real problems. But they are of different kinds. Effectiveness has to do with practice, fraud is a crime, and the use of philanthropic or nonprofit vehicles to fund political action has to do with differing theories of democracy, how we manage elections, and where we draw lines on free speech. The first one one may be better handled outside regulations, the second type is an enforcement issue, and the third, well, now we're talking policy.

A bit more. Effectiveness is hard to regulate. Especially in a sector that is designed (in the interest of pluralist democracy) to be divergent and self-contradictory; expressive, associative, and a home for minority views, protest, and virtue. A place where the values of effective altruism are, rightly, at odds with those who value beauty and truth. Regulated, standardized, external metrics? Let's take that one off the policy table for now.

Second. Fraud - yes, it's a problem. Made worse by slow reporting timeframes and lack of enforcement capacity. Of course, the decline of local newspapers and investigative journalism hurts here, just as it does in other areas where corruption or fraud can be found. One step that should help (and progress has been made, though it seems stalled at the moment) is to make it easier for third parties to track what's going on. One step toward better not mentioned by Callahan - greater visibility, in faster time, into charitable activities and expenditures. As part of broader open government efforts we should open up the nonprofit/philanthropic 990 reporting forms as well as their organization's financial audits. Put them online in machine readable format so third parties can crunch the data. Nonprofits (Sunlight Foundation, Maplight) do a great job of this on political spending - we need to do it on foundation and nonprofit spending as well. Data visibility doesn't negate the need for law enforcement, but real information in real time plus existing laws, might be what we need to expose and act against fraud faster and more comprehensively.

Callahan's other two calls - for tiered tax exemptions and increased payout rates - are worth considering. These are legitimate policy issues, even as they are very "inside baseball." Issues of a similar type include the incentives for perpetuity, the different values placed on donations of time versus money, and how we govern exempt organizations. These are all issues that raise the hackles of the vested interests and existing policy players. These groups are not interested in tiering tax exemptions (or even making sense of the 28 subsections of the tax code) or encouraging organizations to spend more now (and thus, possibly, sunset their endowments - pay themselves out of business). Why? Because when it comes to pushing for new policies - or, more accurately, defending existing ones - more is better. The more enterprises in the sector (read: tax code) - especially if they are distributed across Congressional districts - the better. Existing policy groups know that their political power rests in having everyone - from major universities and hospitals to grassroots policy reform groups - in their tent when it comes to defending the status quo.

crazy idea - perhaps a red herring:
Why exempt the organization and not just the activities? Since all kinds
of groups now conduct social and environmental activities, and produce
positive outcomes, why not provide incentives for those outcomes?

crazy question - relevant to our times:
Existing incentives and corporate law on nonprofits focus on our use of
time and money. What about our uses of digital data? Why aren't we
thinking of ways to ensure that donated private data are being used for
agreed-upon socially positive purposes?

With 28 subsections of the 501C code - including the now-empty section for professional football leagues - it is time to reconsider the what, how, and why of tax exemption. This is not an inside baseball question about existing statutes or enforcement - it is a democracy-level question about civil society.

Political philosophers (and I know a few) struggle to fit our current regulatory structures into theories of liberal democracies. I'd say it's time to stop trying to fit the theory to the reality. Better to take a good hard look at the reality and see if it makes any sense. There are also a whole set of new activities - such as social purpose businesses, crowdfunding, and digital activism - that need to be considered. Looking at the detail of tax exemptions and payout is a start - but it's not enough. Cherry picking some issues out of the system may be pragmatic, but that doesn't mean it will lead to better.

Finally, Callahan is on the money (literally) when he points out how political spending and charitable protection are being deliberately braided together. The 2016 American presidential election will surely accomplish one thing. It will demonstrate just how big a loophole for campaign finance the nonprofit sector (specifically c4 and c6 organizations) has become. This is in no one's interest but a few billionaires and some political operatives (and maybe some of the candidates). Here's a place where transparency is probably not sufficient. More needs to be done to prevent the laundering of campaign dollars through nonprofits as well as its corollary, the perversion of nonprofits into secret campaign finance systems. This needs attending to for the sake of both our democracy and...well, our democracy. Both campaign finance and philanthropy - the political and the independent sectors - need boundary lines re-drawn (and enforced).

At the end of it all, Callahan wants a new federal agency to oversee philanthropy. Given that we have two currently broken federal agencies - the underfunded and political punchline that has become the IRS and a deadlocked Federal Election Commission that will do everything in its power to do nothing - I'm less convinced a new agency is the solution. We also have a set of policy groups with heels dug in to defend the
status quo system and a set of elected officials dependent on
donors.

Here are a few other alternatives, to prime the pump: Maybe the Consumer Finance Protection Board could step in on nonprofit fraud? Maybe the different agencies that oversee schools and corporate fraud (e.g., US ED and student loan debt) could pay closer attention to educational philanthropy, rather than getting in line at the private funder trough?) Maybe those who have ideas for better oversight of nonprofits could join with the recently successful actors fighting back on how the Internet is managed, how intellectual property is regulated, and who makes decisions about personal data? Or those fighting for real campaign finance reform could include some of these concerns? We have 50 State Attorneys General who'd welcome more capacity to fight fraud, the ability to use data and build cross-issue political alliances to shine lights and demand accountability, incredibly talented if woefully thin-on-the-ground investigative journalists, and a frustrated and somewhat disgusted (though neither frustrated or disgusted enough) polity.

The first answer lies not with them, but with us. Count me in to any independent discussion of philanthropic policy - we need to take this on. But to make real change happen? We the people need to care more that these systems aren't working. We need to see the connections - and the harm - between political spending and philanthropy. We need to care about the billions being spent. We need an independent media that can shine more light and uncover other, long-hidden problems. We need to stop thinking that all philanthropy is fine, nonprofits wear halos, celebrities dumping water on their heads will solve our problems, billionaires should run things, all public officials are inept or corrupt, and all technology is democratizing. Democracy takes accountability, visibility, power, and work. Civil society pretty much requires the same. And the former depends on the other.

Tuesday, June 09, 2015

There's always a lot of talk about new technologies and democracy. But is expanded access alone enough to be democratizing? Doesn't democracy also require that that access have some connection to systems of power? That those with access have visibility into the systems that govern the access? That they have some say over how the access is distributed, controlled, and held in check?

I bring this up for two reasons. Yesterday at an Independent Sector "listening meeting" I noted that the organization - and nonprofits in general - seem to exclusively refer to digital technologies as democratizing. This is a partial, and rear-view mirror, view of what's happening. Yes, more people have low cost or free access to voice their opinion and access information. No, not everyone has this. Yes, that information flows through new gatekeepers (cable companies, telcos, ISPs, and search/social media companies). Yes, many efforts at bringing the 3 billion without access to digital technologies online are controlled by a handful (2) US technology companies. (see notes on Zero Rating) This is not democratizing.

This partial view of technology by the nonprofit sector only sees digital technologies as forces for good. This lets the sector off the hook for questioning them. This is problematic. It may - at least in part - explain why most of the US nonprofit and philanthropic sector and the policy associations that purport to speak for it have been so dangerously silent on issues of net neutrality, broadband access, government surveillance, digital content ownership, free speech, and free association.

Let me say (again) why I think these issues are so critical to nonprofits and foundations:

Digital infrastructure, data and gadgetry are (at least partly) where we organize, express ourselves and associate in the 21st century. For more and more of us, they are the central place for these actions, which are then complemented by analog (offline) action. Digital action complements or accompanies most offline efforts at social sector provision.

Therefore, these digital "spaces and tools" are where we associate, express and protest. They are - therefore - fundamental to civil society. They are today's "speakers' corners."

How they are regulated, who owns them, how we access them, what control we the people have over them is therefore existentially important to civil society.

Nonprofits and foundations exist as part of civil society.

Policies and social norms, and yes, even the rhetoric of democratizing, about these digital places is therefore critical to the existence of civil society.

Nonprofit and philanthropic discussions that continue to focus on the gadgetry or the latest social media woop-di-do are missing the point. It's not (yet) quite as bad as whistling past the graveyard, but as the sector focuses on the good and shiny it misses what really matters. The rhetoric of technology as a democratizing force is incomplete. Worse, it is distracting (and being used deliberately as such). I quoted Nathan Schneider on this a week or so ago - here it is again:

"There is a habit in tech culture of saying that the latest app is
“democratizing” whatever it happens to do. This is lovely, but best not
to confuse it with actual democracy. Democracy is about participation
with control, freedom with accountability, privacy with transparency.
Tech companies tend to pick and choose from that list rather
inventively."

Democracy is not just about access. It's about power, transparency, and equality. This is one reason why issues of visibility and feedback are so important (see the latest issue of Alliance magazine on this : second reason for this post).

Tax policy was a key 20th century issue for philanthropy and nonprofits. Digital policies on access, expression, association, consent, security, and privacy are THE defining issues for the 21st century.

Sunday, June 07, 2015

I had the chance to participate in Worldview Stanford's class on Data - it was an amazing cross disciplinary look at how digital data are changing the landscapes for learning, work, and society. Here are two fabulous charts from the sessions - thanks to Nancy Murphy and Stephanie Crowley for sharing.

A few days later I participated in a working session on the ethical use of digital data in civil society. We are focused on developing tools to facilitate ethical, safe, and effective working relationships between data scientists and nonprofits. We talked a lot about mission alignment, consent, privacy, role limits. We don't have public documents yet, but stay tuned. Big thanks to participants and partners, Data Science for Social Good and DataKind. What's rewarding for me in these discussions is we seem to have learned a little something from the past. Rather than repeating "tech is the answer" hubris, I see a data science community that's trying to help nonprofits while recognizing the problematic values inherent in data and places where more harm might be done than good. Digital data are here to stay. To paraphrase Kenny Rogers, the challenge is knowing "when to hold them, when to fold them, and when to walk away."

This was the focus of my short comments at the Data On Purpose conference held at Stanford last week. Civil society - associations, individuals, nonprofits, foundations - need to focus on the "purpose" part of their use of digital resources. Nonprofits and foundations need to know how digital data are being used to frame and shape the landscapes in which they now work, and when and how they might use digital data to further their work. They have to put purpose first and align their practices with their values. A starting point is one of the core values of civil society, a space focused on individual choice in collective action, meaning informed and active consent. Respect people's rights to privacy while finding ways to produce public benefit. Neither of these alone will be enough*. It won't always work. But the values of surveilling governments and data-vacuuming corporations are NOT those of civil society, so it's safe to say their practices are also NOT the right ones.

I'm looking forward to speaking at the Media Impact Forum, along with Van Jones, Brewster Kahle, and Craig Newmark.

Geek Heresy, Kentaro Toyama. Toyama explains why technology amplifies existing disparities and doesn't lead to democracy, equality or social change. A familiar argument to many, his words carry the wisdom of experience and he speaks as a techno-solutionism apostate.

About me

Why is this blog called Philanthropy 2173?

This is a blog about the future. The year 2173 seems sufficiently far enough in the future to give us some perspective. As sure as we are of ourselves now, talking about the future - and making philanthropic investments - requires that we keep a sense of modesty and humor about what we are doing. Philanthropy is for the long-term - for the year 2173.